Mobile Is Growing Fast, But Is It Just Growing Cost?

As if we needed reminding, mobile is going wild. All the stats you care to look at show that the use of mobile devices is exploding.  BRC/Google report that mobile retail search volumes are up 168% year on year.  That’s explosive growth in anybody’s language. They also report that mobile accounts for 10% of all retail searches, up from 9% in the previous quarter

But search is search and purchasing is something else altogether – are we just seeing people sitting in front of the sofa idly browsing? Killing time as they drudge through two hours and twenty minutes of X-Factor? Or do those people with their cool new tablets actually buy anything?

Well there certainly is quite a lot of buying. Amazon has reported that $2billion of all of their sales come from mobile devices.  And screenpages are finding much the same. Their research shows that mobile accounts for about 10% of visits too, but there were some hints in their data about differentiation by category. They felt that there was some evidence that the more upmarket your produce the higher the propensity for the mobile device to be used, as much as 15% in some sectors.

So there’s buying but is this yet a profitable channel?  All the indications are that the growth in search is much higher than the growth of purchasing in mobile devices – that people are browsing and not buying. The screenpages data showed that the conversion rate was about half. So you need to get double the amount of visitors in order to make a sale – twice as many adwords, twice as much cost. Can mobile be profitable?

And the reasons why the conversion rates are lower are not that hard to discern: according to a recent survey by Consensus for WorldPay, mobile shoppers are fed up.39%% thought the purchasing process took too long, 38% thought that they had to enter too much data (As and aside, the survey was undertaken with 1,023 consumers, so I’d love to meet the 10 people who thought that the purchasing process took too long but were perfectly satisfied with the amount of data that they needed to enter). There are very real frustrations about the mobile buying experience and consumers are looking, according to Worldpay, for a better way to pay which simplifies the process. Their survey found that consumers preferred to pay with ewallets like PayPal (63%) rather than conventional cards like Visa or MasterCard (debit cards, 43%; credit cards 37%) or even paying with your phone directly (14%). This latter surprised me – surely there can be nothing more logical than to pay with your phone network, when you’re browsing with them?

So what are the lessons? In my view it is this. First that mobile is obviously going to become a bigger channel and needs to be part of all our strategies. The winners in ecommerce are not necessarily the winners in m-commerce. We’ve all got some work to do if we’re to move the channel away from just being a browsing experience (cost) towards a real selling tool (income).